SECTION 1. Attaining independence from our
detrimental reliance on fossil fuels has been a long-standing objective for the
State.

Hawaii is the
state most dependent on petroleum for its energy needs. It pays the highest
electricity prices in the United States, and its gasoline costs are among the
highest in the country. Fuel surcharges that pass the increases in fuel costs
to consumers have significantly increased the cost of over eighty per cent of
the goods and services sold in Hawaii. Household fuels and utilities costs
rose 36.4 per cent, from the previous year, as reflected in the Honolulu
consumer price index during the second quarter of 2008. Hawaii's energy costs
approach eleven per cent of its gross domestic product, whereas in most states
energy costs are four per cent of gross domestic product. Between 2005 and
2008, state government consumption of electricity increased 3.9 per cent, but
expenditures increased 56.8 per cent.

Reducing our oil
dependence and the consequent price volatility and attaining energy security
are critical. More than ninety-six per cent of petroleum in Hawaii now comes
from foreign sources. Clean energy from indigenous renewable resources has the
potential to provide an estimated one hundred fifty per cent of current
installed electrical capacity.

On January 28,
2008, the signing of a memorandum of understanding between the State of Hawaii
and the United States Department of Energy launched the Hawaii clean energy
initiative. This initiative and long-term partnership between Hawaii and the
United States Department of Energy is aimed at accelerating the use and
development of energy efficiency and renewable energy technologies; allowing
Hawaii to serve as a model and demonstration for the United States and other
island communities; and developing a national partnership to accelerate system
transformation, whereby the following goals are attained:

(1) Achieve a seventy per cent clean energy economy
for Hawaii within a generation;

(2) Increase Hawaii's energy security;

(3) Capture economic benefits of clean energy for all
levels of society;

(4) Contribute to greenhouse gas reduction;

(5) Foster and demonstrate innovation;

(6) Build the workforce of the future; and

(7) Serve as a national model.

The purpose of this Act is to provide a first
step in aligning Hawaii's energy policy laws with the State's energy goals.
For Hawaii to realize energy independence and economic stability, the
transformation of its energy system must encompass changes to:

(1) Hawaii's policy and regulatory framework;

(2) System-level technology development and
integration;

(3) Financing or capital investment; and

(4) Institutional system planning.

To enable energy efficiency and renewable energy
resources to meet forty per cent of Hawaii's
energy demand by 2030, the Hawaii clean
energy initiative set goals for energy efficiency, renewable and indigenous
electricity production, energy delivery and improvements to the electrical
grid, and diversification of energy sources for transportation. The
initiatives to achieve these goals were developed by the United States Department of Energy, the department of business,
economic development, and tourism, and members of the five Hawaii clean energy
initiative working groups during 2008. This effort presents a range of
measures to reach aggressive energy goals while balancing the interests of
various stakeholders.

(B)The use of energy
efficiency technologies, including heat pump water heating, ice storage,
ratepayer-funded energy efficiency programs, and use of rejected heat from
co-generation and combined heat and power systems, excluding fossil-fueled
qualifying facilities that sell electricity to electric utility companies and central
station power projects.

"Renewable energy" means energy
generated or produced [utilizing] using the following sources:

"(a) Each electric utility company that
sells electricity for consumption in the [State] state shall establish
a renewable portfolio standard of:

(1) Ten per cent of its net electricity sales by
December 31, 2010;

(2) Fifteen per cent of its net electricity sales by
December 31, 2015; [and]

(3) [Twenty] Twenty-five per cent of
its net electricity sales by December 31, 2020[.]; and

(4)Forty per cent of its net electricity
sales by December 31, 2030.

(b) The public utilities commission may
establish standards for each utility that prescribe what portion of the
renewable portfolio standards shall be met by specific types of renewable [electrical]
energy resources; provided that:

(1) [At] Prior to January 1, 2015, at
least fifty per cent of the renewable portfolio standards shall be met by
electrical energy generated using renewable energy as the source[;],
and after December 31, 2014, the entire renewable portfolio standard shall be
met by electrical generation from renewable energy sources;

[(2)] (3)Where electrical energy is generated or displaced
by a combination of renewable and nonrenewable means, the proportion
attributable to the renewable means shall be credited as renewable energy; and

[(3)] (4) Where fossil and
renewable fuels are co-fired in the same generating unit, the unit shall be
considered to generate renewable electrical energy (electricity) in direct
proportion to the percentage of the total heat input value represented by the heat input value of the renewable fuels."

(1) By December 31, 2007, develop and implement a
utility ratemaking structure, which may include performance-based ratemaking,
to provide incentives that encourage Hawaii's electric utility companies to use
cost-effective renewable energy resources found in Hawaii to meet the renewable
portfolio standards established in section 269-92, while allowing for deviation
from the standards in the event that the standards cannot be met in a
cost-effective manner or as a result of events or circumstances, such as
described in section 269‑92(d), beyond the control of the utility that
could not have been reasonably anticipated or ameliorated;

(2) Gather, review, and analyze empirical data to [determine]:

(A)Determine
the extent to which any proposed utility ratemaking structure would impact
electric utility companies' profit margins [and to ensure]; and

(B)Ensure
that the electric utility companies' opportunity to earn a fair rate of return
is not diminished;

(3) [Using] Use funds from the public
utilities special fund[,] to contract with the Hawaii natural
energy institute of the University of Hawaii to conduct independent studies to
be reviewed by a panel of experts from entities such as the United States
Department of Energy, National Renewable Energy Laboratory, Electric Power
Research Institute, Hawaii electric utility companies, environmental groups,
and other similar institutions with the required expertise. These studies
shall include findings and recommendations regarding:

(A) The capability of Hawaii's electric
utility companies to achieve renewable portfolio standards in a cost-effective
manner and shall assess factors such as [the]:

(B) Projected renewable portfolio standards to
be set five and ten years beyond the then current standards;

(4) [Revise] Evaluate the renewable portfolio
standards every five years, beginning in 2013, and may revise the standards
based on the best information available at the time [if the results of the
studies conflict with] to determine if the [renewable portfolio]
standards established by section 269‑92[;] remain effective and
achievable; and

(5) Report its findings and revisions to the
renewable portfolio standards, based on its own studies and [those
contracted under paragraph (3),] other information to the
legislature no later than twenty days before the convening of the regular
session of [2009,] 2014, and every five years thereafter."

"§196-4 Powers and duties.
Subject to the approval of the governor, the coordinator shall:

(1) Formulate plans, including objectives, criteria
to measure accomplishment of objectives, programs through which the objectives
are to be attained, and financial requirements for the optimum development of
Hawaii's energy resources;

(2) Conduct systematic analysis of existing and
proposed energy resource programs, evaluate the analysis conducted by
government agencies and other organizations and recommend [to the governor
and to the legislature] programs [which] that represent the
most effective allocation of resources for the development of energy sources;

(3) Formulate and recommend specific proposals, as
necessary, for conserving energy and fuel, including the allocation and
distribution thereof[, to the governor and to the legislature];

(4) Assist public and private agencies in
implementing energy conservation and efficiency programs, the development of
indigenous energy resources, and related measures;

(5) Coordinate the State's energy [conservation
and allocation] programs with [that] those of the federal
government, other state governments, governments of nations with interest in
common energy resources, and the political subdivisions of the State;

(6) Develop programs to encourage private and public
exploration [and], research, and development of [alternative]
indigenous energy resources [which] that will benefit the
State;

(7) Conduct public education programs to inform the
public of the energy situation as may exist from time to time and of the
government actions taken thereto;

(8) Serve as consultant to the governor, public
agencies, and private industry on energy-related matters [related
to the acquisition, utilization and conservation of energy resources];

(9) Contract for services when required for
implementation of this chapter;

(10) Review proposed state actions [which] that
the coordinator finds to have significant effect on [energy consumption]
the State's energy objectives and report to the governor their effect on
the energy [conservation] program, and perform [such] other
services as may be required by the governor and the legislature;

(11) Prepare and submit an annual report and [such]
other reports as may be requested to the governor and to the legislature on the
implementation of this chapter and all matters related to energy resources; [and]

(12)Formulate a systematic process,
including the development of requirements, to identify geographic areas that
are rich with renewable energy resource potential that can be developed in a
cost-effective and environmentally benign manner and designate these areas as
renewable energy zones;

(13)Develop and recommend incentives,
plans, and programs to encourage the development of renewable energy resource
projects within the renewable energy zones;

(14)Assist public and private agencies in
identifying utility transmission projects or infrastructure required to
accommodate and facilitate the development of renewable energy resources;

(15)Assist public and private agencies, in
coordination with the department of budget and finance, in accessing the use of
special purpose revenue bonds to finance the engineering, design, and
construction of transmission projects and infrastructure that are deemed
critical to the development of renewable energy resources;

(16)Develop the criteria or requirements
for identifying and qualifying specific transmission projects and
infrastructure that are critical to the development of renewable energy
resources, including providing assistance in accessing the use of special
purpose revenue bonds to finance the projects or infrastructure;

(17)Develop and maintain a comprehensive
and systematic quantitative and qualitative capacity to analyze the status of
energy resources, systems, and markets, both in-state and those to which Hawaii
is directly tied, particularly in relation to the State's economy, and to
recommend, develop proposals for, and assess the effectiveness of policy and
regulatory decisions, and conduct energy emergency planning; and

[(12)] (18) Adopt rules for the
administration of this chapter pursuant to chapter 91[, provided that the
rules shall be submitted to the legislature for review]."

(C)Any energy transmission line
from the facility to a public utility's electricity system; and

(D)Any on-site infrastructure
necessary for the production of electricity or biofuel from the renewable
energy site;

(2) Initiate the implementation of key renewable
energy projects by permitting various efficiency improvement strategies
identified by the department;

(3) Administer the day-to-day coordination for
renewable energy projects on behalf of the department and the day-to-day
operations of the renewable energy facility siting process established in [[Act
207, Session Laws of Hawaii 2008];] chapter 201N; and

(4) Submit periodic reports to the legislature on
renewable energy facilitation activities and the progress of the renewable
energy facility siting process."

PART V

RENEWABLE
ENERGY PERMITTING

SECTION 7. Section 201N-1, Hawaii Revised
Statutes, is amended by amending the definition of "renewable energy
facility" or "facility" to read as follows:

""Renewable energy facility" or
"facility" means a new facility located in the [State] state
with the capacity to produce from renewable energy at least two hundred
megawatts of electricity[.]; provided that an electricity production
facility with a capability between five megawatts and one hundred ninety-nine
megawatts of electricity and a biofuel production facility with a capacity to
produce one million gallons or more annually may apply to the coordinator for
designation as a renewable energy facility. The term includes any of the
following associated with the initial permitting and construction of the
facility:

(1) The land parcel on which the facility is
situated;

(2) Any renewable energy production structure or
equipment;

(3) Any energy transmission line from the facility to
a public utility's electricity transmission or distribution system;

(4) Any on-site infrastructure; and

(5) Any on-site building,
structure, other improvement, or equipment necessary for the production of
electricity or biofuel from the renewable energy site, transmission of the
electricity or biofuel, or any accommodation for employees of the
facility."

"(g) Each
appropriate state and county agency shall diligently endeavor to process and
approve or deny any permit in the permit plan no later than twelve months after
a completed permit plan application is approved by the coordinator. If the
coordinator has given at least thirty days written notice stating that the
permit plan application is subject to this section and a permit is not
approved or denied within twelve months after approval of a completed permit
plan application, the permitting agency, within thirty days following the
end of the twelve-month period, shall provide the coordinator with a report
identifying diligent measures that are being taken by the agency to complete
processing and take action as soon as practicable. If no further
processing and action are reported by the permitting agency within five months
following the end of the thirty-day agency report period, the coordinator may
deem the permit approved. If a permitting agency fails to provide this
report identifying diligent measures and if the permit has not been
approved or denied within eighteen months following the approval of a completed
permit plan application by the coordinator, the permit shall be deemed
approved."

SECTION 9. There is appropriated out of the
renewable energy facility siting special fund the sum of $1,000,000 or so much
thereof as may be necessary for fiscal year 2009-2010 and the sum of $1,000,000
or so much thereof as may be necessary for fiscal year 2010-2011.

The sums appropriated shall be expended by the
department of business, economic development, and tourism for the purposes of
the renewable energy facility siting special fund as set forth in section
201N-11, Hawaii Revised Statutes.

PART VI

ENERGY
EFFICIENCY

SECTION 10. In January 2008, the United States
Department of Energy and the State of Hawaii signed a memorandum of
understanding to strengthen cooperation to implement clean energy technologies
that will increase energy-efficiency and maximize use of the State's vast and
abundant renewable resources. The legislature finds that the establishment of
this long-term partnership, called the Hawaii Clean Energy Initiative, is
designed to transform Hawaii's energy system into one that uses renewable
energy and energy-efficient technologies for a significant portion of its
energy needs. The partnership aims to put Hawaii on a path to supply seventy
per cent of its energy needs using clean energy by 2030, which can
significantly reduce Hawaii's current crude oil consumption. This type of
clean energy transformation will help to stabilize and strengthen Hawaii's
economy by reducing its dependency on imported fossil fuels and protect its
environment by sharply reducing greenhouse gas emissions.

The United States Department of Energy, as a
leader in clean energy technologies, is working with the State of Hawaii to
further the potential of its natural resources, including wind, sun, and
bioenergy resources, and engage experts in clean energy technology development
to help Hawaii launch projects in conjunction with public and private sector
partners that target opportunities and address critical needs for Hawaii's
transition to a clean energy economy, including:

(1) Designing cost-effective approaches for the
exclusive use of renewable energy on smaller islands;

(2) Designing systems to improve the stability of
electric grids operating with variable generating sources, such as wind power
plants on the islands of Hawaii and Maui;

(3) Minimizing energy use while maximizing
energy-efficiency and renewable energy technologies at new large military
housing developments;

(4) Expanding Hawaii's capability to use
locally-grown crops and by-products for producing fuel and electricity; and

(5) Assisting in the development of comprehensive
energy regulatory and policy frameworks for promoting clean energy technology
use.

Similar to the establishment of a renewable
energy portfolio standard, an energy-efficiency portfolio standard sets a
target of electricity-use reduction to be achieved in incremental stages, as
end-use energy-efficiency programs can make a significant and cost-effective
contribution to achieving the goals and objectives of the Hawaii Clean Energy
Initiative.

The purpose of this part is to maximize
cost-effective energy-efficiency programs and technologies to achieve
electricity-use reductions to the maximum extent feasible by establishing an
energy-efficiency portfolio standard, making public buildings more
energy-efficient, disclosing a property's energy consumption at the time of
sale, and establishing a building energy efficiency revolving loan fund, to
achieve electricity use reductions to the maximum extent feasible.

SECTION 11. The Hawaii Revised Statutes is
amended by adding three new sections to be appropriately designated and to read
as follows:

(b) The energy-efficiency portfolio
standards shall be designed to achieve four thousand three hundred gigawatt
hours of electricity use reductions statewide by 2030; provided that the
commission shall establish interim goals for electricity use reduction to be
achieved by 2015, 2020, and 2025 and may also adjust the 2030 standard by rule
or order to maximize cost-effective energy-efficiency programs and
technologies.

(c) The commission may establish incentives
and penalties based on performance in achieving the energy-efficiency portfolio
standards by rule or order.

(d) The public utilities commission
shall evaluate the energy-efficiency portfolio standard every five years,
beginning in 2013, and may revise the standard, based on the best information
available at the time, to determine if the energy-efficiency portfolio standard
established by this section remains effective and achievable. The commission
shall report its findings and revisions to the energy-efficiency portfolio
standard, based on its own studies and other information, to the legislature no
later than twenty days before the convening of the regular session of 2014, and
every five years thereafter.

(e) Beginning in 2015, electric energy
savings brought about by the use of renewable displacement or off-set technologies,
including solar water heating and seawater air conditioning district cooling
systems, shall count toward this standard.

§ ‑ Public buildings; benchmarks; retro-commissioning guidelines; energy savings
performance contracts.(a) By December 31, 2010, each state
department with responsibilities for the design and construction of public
buildings and facilities shall benchmark every existing public building that is
either larger than five thousand square feet or uses more than eight thousand kilowatt-hours
of electricity or energy per year and shall use the benchmark as a basis for
determining the State's investment in improving the efficiency of its own
building stock. Benchmarking shall be conducted using the ENERGY STAR
portfolio management or equivalent tool. The energy resources coordinator
shall provide training to affected departments on the ENERGY STAR portfolio
management or equivalent tool.

(b) Public buildings shall be
retro-commissioned no less often than every five years. The energy resources
coordinator shall establish retro-commissioning guidelines by January 1, 2010.

(c) Departments may enter into
energy savings performance contracts with a third party to cover the capital
costs of energy-efficiency measures and distributed generation provided the
terms of the energy savings performance contracts conform to the benchmark
standard. The comptroller may review and exempt specific projects as
appropriate to take into account cost-effectiveness.

Energy savings performance contracts shall
be executed according to state guidelines issued by the comptroller, and the
contracts shall be reviewed by the comptroller. To expedite energy savings
performance contracting for public buildings, the department of accounting and
general services shall develop a master energy savings performance contracts
agreement that any department may use to contract with an energy savings
performance contracts provider for energy-efficiency and renewable energy
services.

(d) For existing public buildings
that undergo a major retrofit or renovation, the department or departments
responsible for design and construction shall make investments in efficiency;
provided that the cost of the measures shall be recouped within twenty years.

§ ‑ Energy-efficiency consumer information in sale or lease of real property.Prior to the sale of residential real property, the property owner shall
make a good faith declaration of electricity cost based on the most recent
three-month period in which the property was occupied prior to the date of the
seller's disclosure, pursuant to chapter 508D. This declaration shall only
apply where the owner directly pays the electrical utility bills, and shall not
apply in the case of a foreclosure of residential real property or where there
are no electrical utility accounts associated with the property."

SECTION 12. Chapter 201, Hawaii Revised
Statutes, is amended by adding a new section to read as follows:

"§201- Building energy
efficiency revolving loan fund. (a) There is established in the
state treasury the building energy efficiency revolving loan fund which shall
be administered by the department, and into which shall be deposited:

(1)Funds from federal, state, county,
private, or other funding sources;

(2)Moneys received as repayment of loans
and interest payments; and

(3)Any fees collected by the department
under this section.

(b) Moneys in the building energy
efficiency revolving loan fund shall be used to provide low or no interest
loans or other authorized financial assistance to eligible public, private, and
nonprofit borrowers to make energy efficiency improvements in buildings.
Moneys from the fund may be used to cover administrative and legal costs of
fund management and management associated with individual loans, to include
personnel, services, technical assistance, data collection and reporting,
materials, equipment, and travel for the purposes of this section.

(c) Appropriations or authorizations from
the fund shall be expended by the department. The department may contract with
other public or private entities for the provision of all or a portion of the
services necessary for the administration and implementation of the loan fund
program. The department may set fees or charges for fund management and
technical site assistance provided under this section. The department may
adopt rules pursuant to chapter 91 to carry out the purposes of this section.

(d) All interest earned on the deposit or
investment of the moneys in the fund shall become a part of the fund.

(e) The department may establish
subaccounts within the fund as necessary."

PART VII

SOLAR WATER
HEATER SYSTEM

SECTION 13. It is the intent of the
legislature that the variances provided for in Act 204, Session Laws of Hawaii
2008, (Act 204) will be rarely, if ever, exercised or granted because the
burden of proof will lie with the applicant to demonstrate that a solar water
heater system, regardless of location or circumstance, is not cost effective in
the context of a thirty-year mortgage term. This requires the use of realistic
assumptions regarding interest rates, discount rates, inflation rates, and the
expected average cost of electricity by island over the thirty-year period,
regardless of the cost of electricity, or of oil or other fossil fuels, at a
specific time.

The legislature finds that it is necessary to
clarify the intent of the variance provision that allows for a demand water
heater device. There is the potential that this provision may be used to allow
a developer/builder, the purchaser of a water heating device, of a
single-family dwelling, to circumvent the policy objectives of Act 204.

In its deliberation of Act 204, the legislature
found that the installation of a solar water heater system will only occur if
the developer or builder was able to recover the cost of the investment from
the consumer, who ultimately enjoys the energy savings. Therefore, a solar
water heater mandate was necessary to ensure that an energy savings could be
realized by the consumer, without which the housing market would be sensitive
to certain price points that do not factor in the cost-effectiveness of energy
efficiency devices that reduce the overall energy cost of a home to benefit the
consumer.

The legislature further found that retrofitting
a home for a solar water heater after it was constructed was more costly, and
that such upfront costs, despite incentives such as state and federal tax
credits and utility rebates, were substantial barriers for the average
consumer. The financial barriers can be addressed, however, by including the
installation of a solar water heater into the purchase price and mortgage of a
home, where the cost of the system may pay for itself immediately.

Therefore, the legislature intended for a
consumer to have the option to use gas appliances with the full knowledge that
such a system may be more costly and less efficient. To obviate any attempt to
circumvent Act 204, then, the legislature intends that if the potential
variance applicant is not the party who will ultimately pay for the energy cost
consumption, then only paragraph (1), (2), or (3) of subsection (a) in section
196-6.5, Hawaii Revised Statutes, should apply.

Additionally, the legislature finds that the
continuation of the renewable energy income tax credit needs to remain
available for all homes built before January 1, 2010.

The purpose of this part, is to clarify the
provisions of Act 204, to carry out the legislature's intent.

"(a) On or after January 1, 2010,
no building permit shall be issued for a new single-family dwelling that
does not include a solar water heater system that meets the standards
established pursuant to section 269-44,unless
the energy resources coordinator approves a variance. A variance application
shall only be [approved] accepted if submitted by an
architect or mechanical engineer licensed under chapter 464, who
attests that:

(1) Installation is impracticable due to poor solar
resource;

(2) Installation is cost-prohibitive based upon a
life cycle cost-benefit analysis that incorporates the average residential
utility bill and the cost of the new solar water heater system with a life
cycle that does not exceed fifteen years;

(3) A [substitute] renewable energy technology
system, as defined in section 235-12.5, is [used] substituted for use
as the primary energy source for heating water; or

(4) A demand water heater device approved by
Underwriters Laboratories, Inc., is installed; provided that at least one other
gas appliance is installed in the dwelling. For the purposes of this
paragraph, "demand water heater" means a gas-tankless instantaneous
water heater that provides hot water only as it is needed.

(b) A request for a variance shall be
submitted to the energy resources coordinator on an application prescribed by
the energy resources coordinator and shall include [, but not be limited to
,] a description of the location of the property and justification for the
approval of a variance using the criteria established in subsection (a). A
variance shall be deemed approved if not denied within thirty working days
after receipt of the variance application. The energy resources coordinator
shall publicize:

(1)All applications for a variance within
seven days after receipt of the variance application; and

(2)The disposition of all applications for
a variance within seven days of the determination of the variance application."

"(a) When the requirements of
subsection (c) are met, each individual or corporate taxpayer that files an
individual or corporate net income tax return for a taxable year may claim a
tax credit under this section against the Hawaii state individual or corporate
net income tax. The tax credit may be claimed for every eligible renewable
energy technology system that is installed and placed in service in the [State]
state by a taxpayer during the taxable year. This credit shall be
available for systems installed and placed in service in the [State] state
after June 30, 2003. The tax credit may be claimed as follows:

(1) Solar thermal energy systems for:

(A) Single-family residential property for
which a building permit for a single-family dwelling was issued prior to
January 1, 2010: thirty-five per cent of the actual cost or $2,250, whichever
is less;

(B) Multi-family residential property:
thirty-five per cent of the actual cost or $350 per unit, whichever is less;
and

(C) Commercial property: thirty-five per cent
of the actual cost or $250,000, whichever is less;

(2) Wind-powered energy systems for:

(A) Single-family residential property: twenty
per cent of the actual cost or $1,500, whichever is less; provided that if
all or a portion of the system is used to fulfill the substitute renewable
energy technology requirement pursuant to section 196-6.5(a)(3), the credit
shall be reduced by twenty per cent of the actual system cost or $1,500,
whichever is less;

(B) Multi-family residential property: twenty
per cent of the actual cost or $200 per unit, whichever is less; and

(C) Commercial property: twenty per cent of
the actual cost or $500,000, whichever is less; and

(3) Photovoltaic energy systems for:

(A) Single-family residential property:
thirty-five per cent of the actual cost or $5,000, whichever is less; provided
that if all or a portion of the system is used to fulfill the substitute
renewable energy technology requirement pursuant to section 196-6.5(a)(3), the
credit shall be reduced by thirty-five per cent of the actual system cost or
$2,250, whichever is less;

(B) Multi-family residential property:
thirty-five per cent of the actual cost or $350 per unit, whichever is less;
and

(C) Commercial property: thirty-five per cent
of the actual cost or $500,000, whichever is less;

provided that multiple owners of a single system
shall be entitled to a single tax credit; and provided further that the tax
credit shall be apportioned between the owners in proportion to their
contribution to the cost of the system.

In the case of a partnership, S corporation,
estate, or trust, the tax credit allowable is for every eligible renewable energy
technology system that is installed and placed in service in the [State]
state by the entity. The cost upon which the tax credit is computed
shall be determined at the entity level. Distribution and share of credit
shall be determined pursuant to section 235-110.7(a)."

"(a) The public utilities commission may
contract with a third-party administrator, to operate and manage any programs
established under section 269-121. The administrator shall not be deemed to be
a "governmental body" as defined in section 103D-104; provided that
all moneys transferred to the third-party administrator shall be comprised
solely of public benefit fees collected pursuant to section 269-121[.] or
from funds provided by the federal government or by private funding sources.
The administrator shall not expend more than ten per cent of the collected
public benefits fees in any fiscal year, or other reasonable percentage
determined by the public utilities commission, for administration of the
programs established under section 269-121."

"§226-18 Objectives and policies for
facility systems--energy. (a) Planning for the State's facility systems
with regard to energy shall be directed toward the achievement of the following
objectives, giving due consideration to all:

(1) Dependable, efficient, and economical statewide
energy systems capable of supporting the needs of the people;

(2) Increased energy self-sufficiency where the ratio
of indigenous to imported energy use is increased;

(3) Greater energy security and diversification
in the face of threats to Hawaii's energy supplies and systems; and

(b) To achieve the energy objectives, it shall
be the policy of this State to ensure the short- and long-term provision
of adequate, reasonably priced, and dependable energy services to accommodate
demand.

(c) To further achieve the energy objectives,
it shall be the policy of this State to:

(1) Support research and development as well as
promote the use of renewable energy sources;

(2) Ensure that the combination of energy supplies
and energy-saving systems is sufficient to support the demands of growth;

(3) Base decisions of least-cost supply-side and demand-side
energy resource options on a comparison of their total costs and benefits when
a least-cost is determined by a reasonably comprehensive, quantitative, and
qualitative accounting of their long-term, direct and indirect economic,
environmental, social, cultural, and public health costs and benefits;

(4) Promote all cost-effective conservation of power
and fuel supplies through measures, including:

(A) Development of cost-effective demand-side
management programs;

(B) Education; and

(C) Adoption of energy-efficient practices and
technologies;

(5) Ensure, to the extent that new supply-side
resources are needed, that the development or expansion of energy systems uses
the least-cost energy supply option and maximizes efficient technologies;

(6) Support research, development, [and]
demonstration, and use of energy efficiency, load management, and other
demand-side management programs, practices, and technologies;